Shares in Anglo-Turkish Genel Energy were up almost 5% this week on news of progress on the last segment of a pipeline running directly from the Kurdistan Region of Iraq (KRI) to Turkey, bypassing Baghdad.
The rise comes after a slight drop of 3.5% the week prior after a series of explosions targeted the otherwise highly secure Kurdish capital of Erbil on 29 September.
The pipeline from Genel’s Taq Taq field to Fishkabur on the Turkish border is very close to completion, and welding is now in sight of the pumping station.
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“We expect the entire system, capable initially of exporting some 300,000 barrels a day, to be fully operational around the end of the year,” Genel CEO Tony Hayward told Oilprice.com. “This will be a major inflection point for the Kurdistan Region of Iraq and of course for Genel, allowing us to increase production and realize international prices for our exports.”
Developments at Taq Taq and Tawke are on track to deliver 140,000 barrels a day of working interest production capacity by year end-2014.
Earlier this month, Genel signed a landmark agreement with partner DNO International to supply the first commercial gas from Kurdistan. According to the agreement, around 100 million cubic feet of gas per day from the Summail field in the Dohuk license will be sold on a take-or-pay basis for the duration of the production-sharing contract, or until deliveries reach one trillion cubic feet. The price of gas will range between $3 and $4 per thousand cubic feet over the life of the contract.
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On Wednesday, analysts at Citigroup Inc. issued a report to clients restating a “buy” rating for Genel’s stock. They currently have a GBX 1,150 ($18.55) target price on the stock. Citigroup Inc.’s price objective would suggest a potential upside of 22.28% from the stock’s previous close.
On 29 September, a series of explosions targeting the headquarters of the Kurdish security forces left six people dead. Investor confidence has shown little sign of wavering over Kurdistan, despite the attack. This is the first such incident in Kurdistan since 2007.
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By. Charles Kennedy of Oilprice.com
